Monday, October 11, 2010

BP (NYSE:BP) Fund Not Helping Obama Moratorium Victims

Victims of the oil moratorium in the Gulf of Mexico, imposed by the Obama administration in response to the BP (NYSE:BP) oil spill, aren't going to get any help from the compensation fund of the oil giant, as it's disguised as a permitting process for shallow water drilling, rather than the “de facto shallow-water drilling ban," as described by Sen. Mary Landrieu (D-LA).

BP had set up a Rig Worker Assistance Fund of $100 million, which wasn't tapped into that much because many companies were keeping their workers on payroll even though they were shut down.

Because there is no official oil moratorium for shallow water drilling, that fund and the $20 billion compensation fund, doesn't pay for people out of work because of the Obama oil moratorium.

What the Obama administration has done is imposed draconian restrictions on shallow water oil drilling to the point it is effectively a moratorium.

To give an idea how much it has strangled the industry, only 53 new wells have been permitted this year, while last year 96 passed through the process.

Either shallow water drillers must also keep workers on payroll while seeing if they eventually are permitted, a very expensive decision, or they must let the workers go, which is what is happening at this time.

Industries indirectly related to the oil industry have been dramatically affected as well, with an unknown number of jobs and revenue lost because they served the oil workers no longer working.